Economic Pessimism but Generational Optimism: Australian Perspectives Towards 2014

Saturday, December 28, 2013

Despite some signs that Australia’s economy is growing, in general Australians remain cautious, spending remains subdued, and consumer sentiment remains lacklustre.

Rising living costs are still the Number 1 issue for Australians, economic instability is still of significant concern for 3 in 5 Australians and almost half the population thinking that 2014 will be worse economically than 2013.

Economic pessimism in looking forward to 2014

A recent McCrindle study indicates that a surprising 1 in 3 Australians (33%) are very pessimistic about Australia’s economy, stating the economy is worse now than last year and predicting that it will be even worse next year.

27% of Australians sense Australia’s economy strengthening – stating that Australia’s economy is better now and will continue to build in the year ahead – and 25% are optimistic that Australia’s economy is rebuilding, being worse now than last year but hopeful improving in the year to come.

A smaller number of Australians (15%, 1 in 7) feel that Australia’s economy is on a double-dip – having improved this year they sense that things will worsen in 2014.

Males and Gen Y slightly more optimistic about Australia’s economy

In looking at the figures more closely, only 2 in 5 (42%) of Australians feel the economy is better now than a year ago, and just over half (52%) feel that the economy will be better next year.

Males are slightly more optimistic than females, with 58% of males holding to the belief that the economy will be better next year, compared with just 50% of females feel the same way.

Younger Australians are not only more optimistic about what 2014 will hold for them, but also hold more optimism towards Australia’s economy, with 59% of Generation Ys holding to the belief that the economy will be better in the year ahead (compared with 50% of Generation X and 47% of Baby Boomers).

Key concerns for Australians: Living costs, crime, economic instability

When asked how concerned they were about a number of key areas leading up to 2014, Australians panted a clear picture of the current national mood. Here are the top concerns in looking ahead to 2014:

Year after year, Australians continue to feel the largest apprehension towards the rise of living costs, with 4 in 5 (79%) of Australians seeing the cost of living as an extreme or significant issue.

While rising living costs are of concern to all Australians, concerns vary from generation to generation. The issue of climate change, for example, is of greater concern for younger Australians, with 84% of Generation Y believing this to be of concern, compared to only 62% of the Builder Generation. Older Australians are more concerned with issues of safety and immigration, with 89% believing that ‘migration and multiculturalism’ is of concern, compared with 71% of Generation Y and 70% of Generation X holding to this belief.

Trending concerns from 2013 to 2014: Areas of extreme concern

Rising living costs have grown in concern for Australians since last year (extreme concern is up from 46% last year to 48% today), along with gun crime (up from 33% to 35%). Extreme concern regarding refugees and boat arrivals has declined, however, moving from 37% last year to 30% this year.

Table of Concerns 2014

Other major concerns that Australians voiced:

  • Job security and unemployment 
  • Health care availability and costs 
  • Education issues 
  • Government policy and decision making 
  • Loss of values and community spirit

Personally Optimistic: 1 in 2 Australians personally optimistic about the coming year

When it comes to looking ahead to what 2014 will hold for their own lives, over half of Australians (53%) are positive, to some extent, about what 2014 will have in store, expressing that the year ahead will be better than 2013.

Younger Australians are more optimistic than older Australians with 71% of Generation Y expressing the year ahead will be better, compared with just 52% of Generation X and 39% of Baby Boomers holding to the same view.

Social researcher Mark McCrindle says, “The ‘no worries’ attitude Australians are renowned for can be seen in their outlook for the year ahead. Despite the economic uncertainty, more than half of the nation believe 2014 will be a better year for them than 2013 with just 1 in 5 believing that it will be worse. And in keeping with what we have seen with the younger generations in the past, Generation Y are the most optimistic about the year ahead with 7 in 10 buoyant about what it holds compared to half of Gen X and just over a third of Baby Boomers.”

Australians who express strong optimism indicate that they are secure in their financial situation and have increased trust in the new government:

More job security means less stress financially, and I’m feeling more secure about my employment situation. 

I have gotten rid of most of my debts – for the first time in my life have enough money to not have to worry about paying my bills. 

Politically things seem to have settled down – we now have a new government with sound administration and economic management.

Whether going on a holiday, moving house, starting a family or new relationship, getting married, finding their dream job, pursuing new career ambitions, or entering retirement, these Aussies look forward to 2014 as a year of significant change and life events. They look forward to 2014 to bring new and exciting life events, and have a general optimism of the future!

I’ve just moved house, started a new relationship, started a new job and have booked a holiday for 2014. 

Happiness is what you make of it – I try to be positive most of the time. 

I’m making changes in my life – I plan on getting fitter and being more productive in 2014.

Positively forward-looking Australians also report greater trust in Australia’s economic outlook:

Property prices will drop, the stock market is on the up trend, and we’re attracting foreign investment as a safe growth economy. 

The [economic] mood has changed for the better and people are starting to spend. 

International economies are steadily improving, which means the Australian dollar will continue to drift back to its normal rates, improving exports and Australia’s balance of trade.

Even for those Australians for whom 2013 has had its fair share of ups and downs, there is a general optimism that 2014 will have better things in store.

I’ve been very ill and many things have gone wrong this year – my health is now on the way to recovery, so I should be good to go in 2014. 

We have had a terrible year but next year will be better – I’m hoping for improvements. 

2013 was a difficult year for me personally, but I am optimistic about the year ahead.

1 in 4 say that next year will be about the same

A quarter of Australians think that the year ahead will neither be blissful nor doomsday – they expect things to plow on similar to 2013 – economically, relationally, and health-wise.

This cohort sees ‘no big changes on the horizon,’ and anticipates both good and bad times. They withhold themselves from expecting too much change or are pragmatic in not wanting to predict what the future will hold.

1 in 5 Australians think the year to come will be worse than 2013

Australians who expressed that next year will be worse than the current year (22%) mostly expressed concern for rising living expenses and cost of living pressures, coupled with economic uncertainty and a poor job outlook.

Everything is becoming expensive on a daily basis. Life is getting expensive each month and there is no saving. 

Cost of living pressures are becoming unmanageable – bills keep going up with no rise in income to compensate. 

A lot of Australian jobs are going overseas, we’re seeing a slow economic downturn and an increase in youth unemployment.

Mistrust in the new government or apprehension of political decisions concerning social policy are also of concern:

Apprehension is what I feel at the moment as this government is not doing a good job at all, there are too many changes being made. 

Our country is in a bit of a mess - hopefully we will finally grow up!! 

The government needs to start taking care of its own people – especially the elderly and those with a disability.

Click here to download the full research summary.

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